#BulletinBoard (March 5, 2018)

March 05, 2018

RBI Releases Draft Directions on Repurchase Transactions (Repo)

The RBI in its ‘Statement on Developmental and Regulatory Policies’ dated February 7, 2018 had announced that it shall issue streamlined and simplified directions for repurchase transactions or repos, with a view to harmonize regulations across different types of collateral and also to encourage wider participation of repos in corporate bonds and debentures. “Repo” means an instrument for borrowing funds by selling securities with an agreement to repurchase the securities on a mutually agreed future date at an agreed price which includes interest for the funds borrowed.

On March 01, 2018, the RBI released a draft of the aforementioned directions on repurchase transactions. The draft directions define eligible collateral for repos and address the tenor, trading, reporting, settlement, sale and substitution, pricing of collateral, accounting and other compliances for repos. Comments on the draft are invited from banks, market participants and other interested parties by March 16, 2018, after which the RBI shall release the final directions.

Supreme Court on Doctrine of Sub-Judice

The Supreme Court in Adarsh Cooperative Housing Society v Union of Indian & Ors. has rejected Adarsh Cooperative Housing Society’s plea to stay the release of the feature film “Aiyaary” starring Siddharth Malhotra and Manoj Bajpai. The petitioner alleged that the film projects the petitioner society in an unacceptable manner and that is likely to have an adverse impact on ongoing litigations pertaining to the petitioner. The doctrine of sub judice states that when a matter is under judicial consideration, then it is prohibited from public discussion or scrutiny elsewhere until the matter is resolved through the appropriate judicial forum.

The three-judge bench headed by Chief Justice of India Dipak Misra held that “The doctrine of sub-judice may not be elevated to such an extent that some kind of reference or allusion to a member of a society would warrant the negation of the right to freedom of speech and expression which is an extremely cherished right enshrined under the Constitution.

Supreme Court Clarifies “Financial Institution” Under SARFAESI

The Supreme Court in the matter of Indiabulls Housing Finance v M/S Deccan Chronicle Holdings Ltd. & Ors. held that an entity, which is not a ‘banking company’ under Section 2(1)(d) or a ‘financial institution’ under Clause 2(1)(m), of the SARFAESI Act of 2002 respectively, but subsequently merges with a ‘financial institution’, the successor-in-interest i.e. the merged entity shall inherit all loans, recoveries, security, interest, financial documents, etc. from the merging entity.  The merged entity shall be then entitled to affect recovery or make payments for the merging entities in accordance with the provisions of the SARFAESI Act. This means that on the sanction of the scheme of amalgamation in favour of the merging entity, all the assets and liabilities get transferred to and vest in the merged entity.

Bombay High Court on Domestic Impact of Conviction in Foreign Court

The Bombay High Court in Prabodh Mehta v Charuben Mehta, ruled that while a judgment and order of conviction of a foreign Court against an Indian citizen can be looked into by authorities and Courts in India, such judgment would not be ipso facto binding on such authorities.

The 3 judge bench held that “If we hold that such a judgment of a foreign Court for an offence committed in that country, is binding on the Courts and authorities in India while exercising their judicial and quasi-judicial powers, it will amount to directly or indirectly enforcing the judgment of the foreign Court. What is the effect of such order of conviction, would depend upon variety of factors such as, nature of the proceedings, purpose for which the said order of conviction needs to be taken into consideration, nature of conviction and effect thereof on the proceedings, nature of consequences of the ultimate decision to be taken in the said proceedings, are some of the factors which will have to be taken into consideration while deciding as to how much and what weight age has to be given to such judgment and order of conviction.

Madras High Court on Copyright over Titles of Films

A division bench of the Madras High Court, in M/s Lyca Productions v J. Manimaran & Ors, overturned a single bench decision which upheld copyright protection to the title of a film. Addressing the issue of whether copyright subsists in the title of a film, the Court held that the title alone is not a protectable work under Section 13 of the Copyright Act. The Court held that the reference to cinematographic films under Section 13 is to the entirety of the film, including the visual and sound recordings and not just the title independently. Moreover, in the present case, the Madras High Court held that the contentious title “Karu” was a commonly used, descriptive term in Tamil. The plaintiff could not claim a monopoly over its use as a title, despite obtaining priority registration with the local filmmakers’ association, a registered society.

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